Julien Macdonald is a natural born show-off. "Do you like my watch?" he demanded of well-wishers backstage as his show at London fashion week ended last night, brandishing a David Morris timepiece encrusted with diamonds. "It's worth £92,000. I wish I didn't have to give it back tomorrow."

Last season, Macdonald said that his show might be his last in London, as he was thinking of moving to Milan; he is still threatening to leave, only now the pull is towards New York. "I love London to bits but my business isn't growing. The other designers who moved away are doing much better than I am. I'm not making enough money," he said.

This was always going to be a difficult season for Macdonald. New York and London fashion weeks have been united in the view that bare midriffs and bling are out, ladylike dressing is in. Macdonald is not known for the ladylike look. In fact, his dresses are so short that many come with matching knickers.

As a compromise, he settled on prom dresses, tiered and ultra-feminine, with ruffles and sweetheart necklines, but their stiffness deprived the Macdonald catwalk of its usual raw energy. Much better were the flowing, poppy-print chiffon evening gowns, and the finale, a 1930s-style shimmy of silver sequins with £2m worth of diamonds adorning one shoulder.

The 1930s, along with the 1970s, have been this fashion week's favourite retro reference points. Betty Jackson described the inspiration for yesterday's show as the "decadent days of the 30s together with the louche international lifestyles of the 70s". For evening, there was a showstopping long, pale column with Art Deco silver beading, or a glamorous bead and feather-trimmed kaftan.

Earlier in the day, it was the turn of five emerging designers to stage mini-shows. Unfortunately, most did little to challenge the stereotype that young London designers' collections are ugly, unwearable, and badly presented.

There was a ray of hope, however, in Gardem, the collection by Garen Demerdijan, a Lebanese Armenian designer who was born in Beirut in 1975 but is now based in Paris. Although yesterday was his first catwalk show, he has run a small business since 2001, and has been stocked in the directional London boutique Browns Focus for six seasons.

Yesterday's collection had a sophistication of outlook and quality of execution that set it apart from other young hopefuls. The gently spiralling seams, restrained colour palette and effective use of texture - a dress of creamy crumpled silk with smocking at the torso, a pleated white skirt with a shimmering silver bolero - was reminiscent of Hussein Chalayan's London days.